Preparing for Russia's Gas Supply Suspension
Some Voices Oppose Forced Reduction Measures
[Asia Economy Reporter Kim Hyunjung] As concerns grow that Russia may suspend fuel supplies, the European Union (EU) is expected to propose a 15% reduction in natural gas usage by member countries starting next month.
Bloomberg reported on the 19th (local time) that the EU Commission is set to announce a demand reduction plan to cope with a potential full suspension of Russian gas supplies, which will include this proposal.
The news agency cited three EU diplomats familiar with the matter, stating that the so-called "Gas Saving for a Safe Winter" plan is scheduled to be announced on the 20th. The plan also includes provisions that if supply and demand worsen or voluntary reductions prove insufficient, mandatory measures will follow. The Commission, the EU's executive body, is also expected to propose a phased approach including heating and cooling reductions and market-based measures.
Energy supply instability, including gas supply suspension, could pose a serious risk to the entire European economy. According to Bloomberg's estimates, if related issues worsen this winter, the EU region's gross domestic product (GDP) could decrease by 1.5%.
Russia's gas supply reductions have affected 12 EU member states, and Germany raised its gas risk alert to the second-highest level last month. The inflow from Russia last month was less than 30% of the 2016?2021 average.
The reported reduction plan requires approval from member states, and the Commission may request approval at an emergency meeting of energy ministers as early as next week. It is known that many countries have already prepared emergency plans and that demand will decrease even without related measures, leading to considerable opposition to forced reductions.
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